Despite attempts by the Nigeria National Petroleum Corporation (NNPC) to assure Nigerians that there were no plans to hike the price of Premium Motor Spirit (PMS), generally known as petrol, it has been revealed by oil marketers that the price of the commodity may increase to N151.87 per litre as its current ex-depot price is N133.28 per litre.
In addition, marketers also explained that the increase may be unavoidable due to the continued scarcity of the United States dollar and called for urgent steps to address the situation in order to sell the PMS at the approved rates of N145 per litre.
Consequent upon investigations by Punch, it was gathered that in a bid to prevent a price increase, the government conveyed a meeting of stakeholders in the downstream oil sector on Tuesday, 9 August, at the headquarters of the Petroleum Products Pricing Regulatory Agency in Abuja.
An oil dealer who was present at the meeting explained that the actual cost of the PMS had climbed above the N145 per litre fixed rate, saying that when the cost of distributing petrol was added to the ex-depot price, the real cost of the commodity was N151.87 per litre.
Speaking to Punch, the oil marketer said:
“Since the ex-depot price is around N133.5 per litre and the selling price is N145 litre, when you remove the ex-depot cost from the selling price, you’ll get about N12. Now, from this N12, consider the distribution margin and other costs from the depot; if all these costs are less than N12, then the oil marketers are making profits and there will be no complaint.
“But if the reverse is the case, then they have a complaint. I want you to find out what is the marketers’ margin, transporters’ margin, bridging fund, Petroleum Equalisation Fund, administrative charges and more. When you add all these together, you will realise that truly, the marketers are doing all they can to hold the pump price at the N145 per litre band.”
Checks by the newspaper with the PPPRA revealed that the marketer’s claim was true as the distribution margin for every litre of petrol consumed across the country, retailers charge N6; transporters’ allowance is N3.36; bridging fund, N6.2; dealers’ charge, N2.36; marine transport average, N0.15; and admin charge, N0.3; making a total of N18.71.
By adding this to the N133.5 ex-depot price, the final figure is N151.87.
A senior official of the Ministry of Petroleum Resources talked about the meeting between government officials and the marketers saying that the government might either subsidise the product again or consider some form of concession to the marketers with respect to the cost of the dollar.
The official said:
“The issue of forex has been a challenge to both the government and the oil marketers. All of a sudden, the dollar skyrocketed to about N400 and the product we are concerned with here is an international product. So, if they are bringing in the product by buying dollar at N350, then it is obvious that they are really working hard to remain in business.
“For if we are in a truly deregulated market environment, then the price of the product should have increased beyond N145 per litre; there is no doubt about that. Meanwhile, there was a highly confidential meeting between the management of the PPPRA and stakeholders in the sector on this matter.
“I may not be able to tell you the resolutions that were reached concerning the issue of pricing of petroleum products, but the body language of those who participated in the meeting suggests that the government may be considering some form of concessions to the oil marketers as it did for the Muslim pilgrims. We all know that the government cannot afford to increase petrol price again, not at this time.”
Meanwhile, the Nigerian National Petroleum Corporation (NNPC) through its Managing Director, Maikanti Baru, has assured Nigerians that it has no plans to increase fuel price as there was no directive to that effect.